The Commerce Commission has accused HelloFresh of reactivated customers subscriptions without clearly seeking their permission (file photo). Photo: RNZ / Dan Satherley
The Commerce Commission has filed criminal charges against meal delivery company HelloFresh New Zealand for alleged misleading behaviour.
The regulator claims the company misled customers in cold calls trying to get discontinued subscribers to sign up again.
But in a statement, HelloFresh says it had co-operated with the Commission's investigation and took remedial action as soon as it became aware of the activities.
The claim related to conduct between February 2022 and July 2023, when previous HelloFresh customers were offered vouchers without being told that accepting them would reactivate their subscription, the Commission said.
Commission Deputy Chair Anne Callinan said the Commission believed HelloFresh breached the Fair Trading Act as the conduct resulted in some cancelled subscriptions being reactivated without the customers' express knowledge or consent.
"Taking payment for services customers aren't aware they're buying or have not agreed to purchase is unacceptable behaviour," she said.
"We're concerned some consumers have been misled into paying for services from HelloFresh they didn't want through the use of misleading wording and processes in cold calls.
"In these calls, it was not made clear to some customers that if they accepted a discount voucher offered, their subscription would be reactivated, and their bank account would be debited."
The Commission started an investigation into HelloFresh after receiving a high number of complaints about its sign-up, cancellation, and reactivation processes. The charges were filed in Wellington District Court.
HelloFresh issued a statement in response to the decision to file charges: "The alleged breaches are in relation to reactivation of cancelled subscriptions where call centre staff did not follow our strict processes and procedures relating to the reactivation of cancelled subscriptions following offers sent to former customers.
"This practice fell well short of our standards and should not have happened. We sincerely apologise to any customers who were impacted or inconvenienced at the time."
Commission increasing scrutiny of online trading
"Buying products online is increasingly a way of life for Kiwi consumers and so the Commission is prioritising action against illegal online sales conduct," Callinan said. "This includes subscription traps, which come in many forms and include situations where consumers are misled into signing up for a paid subscription without knowing.
"Subscription traps are becoming more common as more businesses offer subscription-based services. We're seeing more complaints about subscription services, the way consumers are being signed up to ongoing service contracts, and difficulties in cancelling subscriptions."
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
